Convergence of the EU member states in Central-Eastern and South Eastern Europe

(EU11): a framework for convergence inside a close regional cooperation

István P. Székely1 and Robert Kuenzel2 3

Chapter 2 in Volume I
Does EU membership facilitate convergence?
The experience of the EU's eastern enlargement
Volumes I and II
Edited by Michael Landesmann and István P. Székely
Palgrave-Macmillan, January 2021

The volumes can be purchased and downloaded at the website of Palgrave-Macmillan

Volume I https://www.palgrave.com/gp/book/9783030576851
Volume II https://www.palgrave.com/gp/book/9783030577018

Abstract
This chapter offers a framework to analyse the impact of EU membership on economic
(“means”), institutional (“ways”) and social (“ends”) convergence of EU11 countries to the
frontier. It identifies the channels through which this impact works: trade, investment, finance,
migration and institutions. Using this framework, the analysis finds that EU membership shaped
the convergence process in important ways. EU11 countries as a group were among the fastest
converging countries in the world. The main drivers were trade and FDI. However, the finance
channel injected volatility into the convergence process. Through the trade, investment and
finance channels, EU membership unleashed strong market forces. However, the institutional
channel remained weak, and institutional convergence lagged behind economic convergence.
Thus, the unleashed market forces also caused negative side effects. Rapid economic
convergence did not translate into a commensurate social convergence. Moreover, fast
economic convergence also brought about major imbalances and vulnerabilities. Slow social
convergence and imbalances in economic convergence may in turn jeopardize the sustainability
of the rapid economic convergence the region has achieved so far.

Keywords: Economic, social and institutional convergence, European Union, Eastern

Enlargement, EU11, CEECs.

1
European Commission, DG ECFIN and Corvinus University of Budapest.
2
European Commission, DG ECFIN.
3
The views expressed are solely those of the authors and do not necessarily represent the official views of the
European Commission.